Thursday, October 16, 2008
So about Joe Daplumber's taxes... According to CNNMoney.com, McCain has been fairly off-track about which small businesses would end up paying more taxes under Obama's plan. I'll let you pause for a minute to regain your composure from that shocker. To scare those Joe Sixpacks and Joe Daplumbers out there, McCain has been insisting that many - not some, not a few, but many - small businesses would see tax increases. He said it last night, in fact. "The small businesses that we're talking about," he said after Joe Daplumber was brought up, "would receive an increase in their taxes right now." On other occasions, he insists Obama's plan would tax half the income of small businesses. But hold on here just a gosh-darned minute. It seems that nobody checked the definition of small business - and McCain is using this one: Anyone who files a Schedule C, E or F with the IRS. Under those guidelines, along with some IRS data, McCain is sort correct - half would be taxed under Obama's plan. Out of 34.7 million filers of C,E, or F's, only 479,000 fall into the top two brackets Obama wants to raise taxes on. I'm no math major, but that seems like a lot less than half. What does the Small Business Administration call a small business? A company with less than 500 employees and with staff on the payroll other than the owner. However, just saying anyone who files a Schedule C is kind of a really broad definition of a small business. People who file these forms aren't running a business, per say. They're freelancing, reporting rental income and the like. Do you know who falls into that majority of filers that won't be affected? Joe Daplumber, aka Joe Wurzelbacher. According to an interview with WTOL, Wurzelbacher said he would like to buy the company he works for eventually, but said, "Currently I would not fall into Barack Obama's $250,000-plus." According to the NFIB's most recent member survey, only 14% said they had $200,000 or more in annual income. There's also the amount taxed - it's not like if you edge into that 33% bracket you're going to pay more taxes on your whole taxable income - just on the part that is exceeding the cutoff.